Working Papers

China's policy of holding down the value of its currency and monetary easing in the United States have led to large capital inflows into emerging economies. Although consensus in emerging markets has formed around capital controls, Francis E. Warnock challenges their underlying assumptions.

Many low-paying jobs have moved from the United States to rapidly growing markets abroad, and higher-paying jobs may soon follow. While Americans benefit from cheaper goods, employment opportunities have diminished. Policymakers should address this trade-off as a first step toward tackling questions of inequality and economic distribution.

High and volatile energy prices have driven the regulation of commodity financial markets to the forefront of the U.S. and G20 policy agendas. Integrated commodity markets require international policy coordination, but not all domestic and international policy initiatives are equally desirable.

This second installment of the Capital Flows Quarterly series investigates two factors that could substantially alter the long-run value of the U.S. dollar: the dollar's reserve status and the sustainability of U.S. international debt.

The dollar's status as the world's reserve currency has become a facet of U.S. power, allowing the United States to borrow effortlessly and sustain an assertive foreign policy. But the capital inflows associated with the dollar's reserve-currency status have created a vulnerability, too, opening the door to a foreign sell-off of U.S. securities that could drive up U.S. interest rates. In this Center for Geoeconomic Studies Capital Flows Quarterly, Francis E. Warnock argues that a sell-off came close to happening in 2009. How the United States uses this reprieve will affect the nation's ability to borrow for years to come, with broad implications for the sustainability of an active U.S. foreign policy.

Most discussions about using international institutions to address climate change focus narrowly on the work of the United Nations Framework Convention on Climate Change. However, many other international institutions also have a significant role to play in mitigating and adapting to the effects of climate change. This paper examines the existing climate-related efforts and capabilities, as well as the future potential, of a variety of international institutions, including those that deal with environment, energy, and economics. While there are still major shortfalls, the paper argues that there is significant existing institutional capacity to draw from in addressing climate change.

In this CGS/IIGG Working Paper, Jeffry A. Frieden reviews the historical record on the political fallout from the unraveling of macroeconomic imbalances. He warns that the coming adjustments may test the capacity of national governments and international institutions to maintain an open international economic order.

In this Center for Geoeconomic Studies Working Paper, Steven Dunaway argues that the world economy faces the prospect of a prolonged period of slower growth. Other sources of demand need to be found to take up the slack left by slower U.S. growth. However, the prospects for this do not look good, as none of the other major economies appear inclined to make the necessary changes in policies to deal with their imbalances and raise their demand.

In this Center for Geoeconomic Studies Working Paper, Karen H. Johnson argues that gross financial flows, not net external imbalances, reveal which countries are most critical for global financial stability.

The news that the Doha Round of the World Trade Organization has broken down in Geneva has made many Americans pessimistic about the future of multilateral trade agreements. In this Center for Geoeconomic Studies Working Paper, Douglas A. Irwin makes the case for optimism and argues that the key to advancing the free-trade cause is political leadership of the sort demonstrated by a heroic but near-forgotten figure, the late secretary of state Cordell Hull of Tennessee. Irwin traces Hull’s path through the decades and shows how his legacy lights the way for leaders of both political parties.

The sharp run-up in food prices has triggered riots in several countries and threatened to push millions of people below the poverty line. In this Center for Geoeconomic Studies Working Paper, Karen H. Johnson explains the causes and likely future course of food-price inflation and analyzes the implications for central banks, trade negotiators, and agricultural policy.

Intuition tells us that oil-rich countries are not friendly to the United States, and that entreprenurial—or “smart”—countries are not endowed with oil. In this Center for Geoeconomic Studies Working Paper, the authors find a triangular relationship between oil wealth, entrepreneurial spirit, and friendliness to the United States. They confirm the idea that “oily” countries are not U.S.-friendly, in contrast to smart countries, which are friendly to the United States and do not have oil. The authors conclude that it is in the U.S. interest to support education and economic diversification in petro-states so those states can become more entrepreneurial and friendly.

CGS Books

In Market Madness, Blake C. Clayton shows that predictions of dwindling oil supplies and a rise in prices have been empirically proven incorrect. Technological advances and geopolitical shifts have repeatedly prompted sudden, severe drops in oil prices—exactly like the one we are experiencing today.
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In By All Means Necessary, Elizabeth C. Economy and Michael Levi explore the unrivaled expansion of the Chinese economy. China is now engaged in a far-flung quest, hunting around the world for resources, and deploying whatever it needs in the economic, political, and military spheres to secure them. More

In Money, Markets, and Sovereignty, the authors present a fascinating intellectual history of monetary nationalism from the ancient world to the present and explore why, in its modern incarnation, it represents the single greatest threat to globalization. More

In The Closing of the American Border, Edward Alden goes behind the scenes to tell the story of the Bush administration's struggle to balance security and openness in the wake of the September 11, 2001, terrorist attacks. More

CGS Council Special Reports

In this report, Benn Steil shows that the financial crisis is the inevitable bust of a classic credit boom, and explains how monetary, taxation, and home ownership promotion policy combined with other features of the financial system to fuel an unsustainable buildup in debt. He recommends significant reforms to reverse the debt financing bias and make the system more resilient to falls in asset prices. More

In order for policymakers to tackle today’s global economic crisis, this report argues, they must go beyond bailouts and stimulus packages and focus on one of the crisis's root causes: imbalances between savings and investment in major countries. More